Accounting (Oh No!!)

How many of you find Accounting to be the most fascinating thing you have ever studied?

How many of you would rather have a root canal without Novocain instead of studying Accounting?

The unpleasant fact is that if you want to give your business the best chance of being successful,
you need to have a basic understanding of Accounting.

I can take a look at a client's Balance Sheet and in about 2 seconds tell if there are major problems. In order to do this, you have to understand what a normal Balance Sheet looks like. This means, like it or not, you have to have a basic understanding of Accounting.

For example, I had one client that was writing off invoices, in other words, reducing income.
However, instead of writing the amount off to an expense account, he was writing it off to a bank account on QuickBooks. The result was that he had created a fictious bank balance of over $10,000 on his Balance Sheet.

I had another client who had mapped half of his expenses to Accounts Payable, thus he probably over paid his income taxes, because he understated his expenses.

Remember, no one is going to care more about your business than you. Make sure that you protect yourself by having a basic understanding of Accounting.

As a resource, although the title is very unflattering, I recommend the book "The Complete Idiot's Guide to Accounting", second edition by Lita Epstein, MBA and Shellie L. Moore, CPA